A delegation of leading Iraqis that went to Najaf has failed to end a stand-off between Shia militiamen and US-led forces in the holy city.
Ceasefire talks over Najaf collapsed at the weekend
The delegates went to the Imam Ali shrine to meet radical cleric Moqtada Sadr, who has led a 12-day-old uprising, but he refused to see them.
The convoy, led by a cousin of Mr Sadr, was sent by religious and political leaders at Iraq's national conference.
Heavy clashes continued in Najaf as the group left the site.
Fighting intensified on Tuesday near the Imam Ali shrine, where Mr Sadr and his forces are surrounded by US tanks.
At least one US aircraft dropped bombs on a cemetery - where Mr Sadr's Mehdi militia has taken up positions.
The militiamen responded with mortar and machine-gun fire.
The national conference taking place in Baghdad has called on the militiamen to lay down their arms and leave the Imam Ali shrine - one of the holiest sites in Shia Islam.
The head of the delegation, Sheikh Hussein Sadr, said his mission was not to negotiate with Mr Sadr.
"This is a friendly mission to convey the message of the national conference," he said.
But a spokesman for Mr Sadr, Heidar al-Tarfi, said the cleric had reservations about the envoys.
He added that Mr Sadr considered them messengers rather than negotiators.
However another of the rebel cleric's aides, Sheikh Mahmoud al-Soudani, told reporters in Baghdad that Mr Sadr declined to meet the team "due to security reasons and heavy shelling in Najaf".
In other developments across Iraq:
- A British soldier has been killed and another injured after clashes with militants in the Iraqi city of Basra.
- A mortar shell reportedly fell in the heavily fortified official area of Baghdad, wounding an American soldier and a civilian security guard.
An Iraqi police official was shot dead and two policemen were injured in the city of Ramadi, west of the capital.
A Jordanian car dealer kidnapped eight days ago was rescued by Iraqi police outside the central holy city of Karbala, AFP news agency reported.
Lebanese media aired a tape said to show a Lebanese man held hostage in Iraq, surrounded by men with guns who threatened to kill him if the company he worked for did not pull out of Iraq within 72 hours.
In the capital, Baghdad, at least seven people died in a mortar attack on Tuesday.
Conference aims to choose an Interim National Council of 100 members
The council will oversee, advise and question government policy
National Council can veto orders or decrees from the Council of Ministers by a two-thirds majority
National Council can appoint replacements to the presidency in the event of death or resignation and can approve budgets
The explosion happened in the crowded al-Rashid street, engulfing the heart of the city's business district in thick, black smoke.
The violence in Najaf broke out on 5 August, shattering a truce agreed in June.
Mr Sadr says his militiamen will leave only when foreign troops withdraw from the holy city.
The uprising has overshadowed the national conference in Baghdad.
More than 1,000 Iraqi leaders are still discussing the selection of a 100-member Interim National Council - which is to act as an embryonic parliament until direct elections in January.
The selection was due to be completed by the end of Tuesday, but discussions have been extended to Wednesday amid disagreements among the delegates about the candidates and the way they are selected.